Sunday, Jan 03, 2010
Sand castle maybe
Observer: An Englishman's home is his castle
A good article about why HPI is bad in the newspaper for Islington flat owners with a place in Devon for the weekend.
Posted by chrisch @ 09:35 AM (909 views) Add Comment
14 Comments
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1. dbc reed said...
Another anti-Homeownerist blast from the Observer/Guardian resistance group.One of the best articles and not from one of the usual suspects either.
2. phdinbubbles said...
Very good article. Guardian/Observer easily winning the debate re: house prices/economy at the moment.
3. markj69 str05 said...
I agree, quite a good article. Although, not pointing out anything we didn't already know. A reasonable summary that will maybe change some sentiment.
'So British homeowners generally owe much more now than they thought they did two years ago.' Not sure I agree with this. If someone borrowed £50K against their property, they still owe £50K. OK they feel like their personal wealth might have reduced. But, they knew what they were borrowing. They new the risks, as well as everyone else, including myself (I decided not to play the game personally). Anyone speculating on any market needs to take the rough with the smooth. If only the gov't were prepared to see that through. What disincentives are there for negligent high risk investment, when thepublic are expected to bail them out? - None. Things have to change.
'That means politicians will start to take more notice.' - No they won't - They are puppets hanging from the strings of the financial big boys. Only after the election will things have a chance to change. I say 'chance', because IMO if Labour get in again, I don't think things will change - Expect more of the same.
4. letthemfall said...
The only issue I take with this article is the notion of a housing shortage. If there is a shortage, it is a shortage of decent housing, but perhaps more important, also a shortage of housing in the sense of the numbers wanting to own multiple houses. I saw a figure recently for the percentage of homes in second ownership; I've forgotten what it was now but it was high enough to surprise me
This must be contributing to a shortage given they are empty most of the time; therefore making 2nd home-ownership in our small island prohibitively expensive should at least be considered equally with embarking on a large building programme.
5. shipbuilder said...
I'm with letthemfall. Surely one step that would have an immediate effect on both the 'lack of houses', affordability for the average person and public finances would be a huge tax on second homes?
If it were delivered withe the correct rhetoric - 'we all need to pull together to address our housing shortage etc.', who could argue?
Yet on this site, formed because of the housing situation, most are more vocal about the need for public sector cuts - the number 1 policy of the politicians who we spend the rest of the time slagging.
I find it bewildering.
6. markj69 str05 said...
From April '07 - http://www.guardian.co.uk/money/2007/apr/26/buyingtolet.business
'This compares to the 330,000 buy-to-let mortgages taken out last year alone. Today, the total number of buy-to-let mortgages stands at 850,000, which amounts to 9% of all mortgages.'
Not sure where it'll be now.
7. rumble said...
On behalf of Mark W - LVT might have some effect on second home owning.
Mark@3 "What disincentives are there for negligent high risk investment, when thepublic are expected to bail them out? - None."
Standard socialist problem - a society of children - idiocracy.
8. markj69 str05 said...
@7 Rumble.. (And MW)... I thought the idea (Your idea MW), was that LVT would replace several other taxes and poss' correct some of the unfairness of those taxes.
LVT on property in general would therefore not impact on 2nd home owners, unless there was another higher rate band being applied to homes owned, greater than 1.
9. markj69 str05 said...
Another brief comment on taxation - I heard on the radio this morning, some accountant chap i believe, talking about some book - 'bible of taxation'. Apparently, it used to be 5,000+ pages, but in recent years has increased to 11,000+ pages. Maybe accountants/financiers are loosing their eye-sight, so they increased the font size!!! You know what they say makes you go blind - Maybe they really are all a bunch of Bwankers. Ha ha.
10. rumble said...
Resource rent - the more used, the more paid - they'd be paying for the land they don't use much.
11. markj69 str05 said...
Not sure if this ic current or correct but I found this:-
http://www.adviceguide.org.uk/index/your_money/tax/council_tax.htm#holiday_homes_and_second_homes
'Holiday homes and second homes
Furnished holiday homes or second homes will be liable for council tax but will have a 10 per cent – 50 per cent discount because no one lives there on a permanent basis. This depends on the policy of the local authority where your holiday home or second home is located.'
I was unaware of this (Only ever owning 1 home/property at any one time). Just assumed all property was subject to C/Tax.
Not sure I understand why it's cheaper for someone who already owns a 'home' to own more 'property/s', over those trying to afford just one 'home'. Especially when they're telling us there arn't enough properties to go around.
Also makes you wonder who decides whether it's 10% or 50%. Loopholes loopholes everywhere and not a one to benefit the average family!
12. phdinbubbles said...
markj69 str05
Council tax is exempt for vacant properties for up to 6 months and it's very easy to get further exemptions if the house is having any work done on it. That's the first thing that needs changing.
13. Chris said...
I'll give you a good reason why HPI is good for the masses. (I.e. the none homeowner)
We sell commercial property in the Midlands and just before Christmas I had a meeting with the head of City Planning in a medium sized City regarding a factory that has come onto our books. The factory is situated between other commercial buildings and a large residential area. The object of the meeting was to establish what the Council were wanting with the site. Remember it is not owned by them, but if the site is going to be re-developed, they hold the key to future planning consent.
From the meeting it was clear that they wanted it to be developed into more residential housing rather than used for more business & more jobs etc. This surprised me but as the meeting progressed, it became very clear why.
Every house builder that builds more than 13-properties on a site, is obliged to give, free of charge 30% of the site to the Council. The builder must also build social housing on this site (With some help of a government grant) and hand these properties over to the Council.
On top of this, they must then give the Council around £10,000 per property towards the education infrastructure. (Schools etc.)
They must also give around a million pounds (This site can accomodate 80 properties) towards the City infrastructure. (New pathways, new parks & equipment, more CCTV etc.)
The builder must also provide green space, a park, play park etc. all for free!!!
All in all the Council will do very well out of it and so will other people living in the City with more council accomodation to rent, new parks etc.
Now why does HPI matter? Well after a number of discussions with the big house builders, most of them are sitting back waiting for a stability in the housing market before they throw 14-million pounds at a site this big. After all, it's the first time buyers and other families that buy the other 70% of houses to be built there, that needs to fund the whole project in the first place and that won't happen unless we see some HPI.
We always hear about the poor sods that can't afford to buy a property and these fat cats that make lots of money from their misery, but it's not as simple as that. Councils have found a way to fund much of their expenses during the boom times and when the boom times end, they are hit just as hard and so are the people looking for somewhere to rent.
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